Uncommon Wisdom

Jul 16 2008   2:53PM GMT

SK Telecom sniffs around Sprint

Tom Nolle Tom Nolle Profile: Tom Nolle

The low dollar may be contributing to interest in Sprint by SK Telecom, though many international operators have eyed acquisition as a means of entering the US market.

There isn’t much commentary on the deal, but we are hearing the SK Telecom may be betting that the WiMAX position in the US will be worth more than investors currently believe it will, and that the value of Sprint will therefore be higher.

There is no assurance that regulators would buy such a deal, even if Sprint were to agree. However, if the deal is even attempted it would likely show that Sprint’s board is concerned about the company’s future. Sprint continues to be dependent, in our view, on getting a lot of non-traditional devices onto WiMAX, and it is not likely that much progress can be made in this area until 2009, even with the backing of Intel.

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